ON November 14, 2024 VM Building Society celebrated 146 years in existence, having opened its doors on November 14, 1878 and aiming to use mutuality to encourage Jamaicans to save and buy a house — just 13 years after the Morant Bay Rebellion and the end of the US civil war.

“In Jamaica at the time — that was deemed to be unequal — we opened our doors first in 1878, and interestingly, the company was founded by some clergymen, not from one denomination, but from multiple denominations, including a rabbi,” Paul Elliot , the current CEO of VM Building Society, outlined as he reflected on the beginnings of the entity which has since grown from being a single small office to a branch network numbering 16 in Jamaica, and a business which has now expanded to offer from more mortgages to a suite of financial services in Jamaica, the Caribbean, UK, US and Canada.

The clergyman who led the effort back then was the rector of Kingston Parish Church, the Reverend G W Downer, who, along with his colleagues, set up the member-based mutual to help combat the glaring financial inequity that existed at the time in homeownership.

This was done through encouraging savings, something Elliot said is now a “bad word” these days, especially given the impatience many show in today’s world “where everybody wants things now”.

“Still, savings is crucial — especially when we consider the low disposable income amongst most Jamaicans,” he pointed out.

But going back to the beginnings of this Jamaican institution, its history has been storied.

The founding purpose of the mutual would power the business through the following decades as the world changed. Through two world wars, The Great Depression, major man-made and natural disasters, and a booming global population, VM would grow and thrive, successfully facilitating the life aspirations of its members, even as these evolved with the passage of time.

Its own history marked in the sands of time shows it was the first building society in 1954 to offer 20-year mortgages and to set up its first service bureau to facilitate savings and loans to the Diaspora community in 1981. Two years later its first overseas branch was opened in the UK, followed by Canada and the USA. Then, it got into insurance services in 1990 and a year later, in 1991, further expansion took place with Victoria Mutual Property Services Limited (VMPS) receiving its licence as a real estate broker. In 1994 it added money transfer services and in 1998 it started Alpha Financial Services, which has since been renamed VM Wealth Management.

The journey of expanding into other services did not stop there. In 2010 Victoria Mutual Insurance Company merged with British Caribbean Insurance Company (BCIC) and three years later, in 2013, it took over Prime Asset Management which became a fully owned subsidiary within the Victoria Mutual Group, later renamed to VM Pensions Management.

With all the changes taking place in the financial sector at the time wherein building societies were being withered down to just a few members, VM itself considered giving up its building society licence in favour of taking a commercial banking licence but, after much deliberations, decided against it.

“Once the decision was taken not to do that we then had to pivot to become a modern mutual where our members can still feel a part of the ownership of the company, and we could also continue our programme of giving back to our members,” Elliot explained.

And that led it to, instead, seek Bank of Jamaica’s approval to expand the products and services offered by the building society.

“Because we are competing with large commercial banks, our members may have need for other types of loans outside of mortgages…and we got permission to broaden [our] product offering[s] and in 2018 got approval to start issuing auto loans and unsecured loans. We have since launched our suite of credit cards, which will be expanded going forward.”

In 2017 as well, VM Investments Limited launched an initial public offereing of its shares and started trading on Jamaica Stock Exchange.

Other significant milestones in the company’s history include starting its VM Foundation in 2018 as the philanthropic arm of VM Group, while in 2019 VMIL acquired a stake in Barbados-based online loans provider, Carilend. In 2021 Victoria Mutual Group executed a brand transformation exercise to launch a brand new look and feel. In that same year its VM Wealth subsidiary entered into agreement to acquire Republic Fund Incorporated (RFI) Barbados, renaming it in January 2024 as VM Wealth Funds Barbados.

Still, the changes have not stopped there, and as the building society enters a new era it has been faced with new challenges to overcome and new opportunities to explore.

Issues in the banking sector, especially as it relates to the availability of automated banking machines (ABMs), have been uncovered, forcing the central bank to set new standards for all to follow to ensure consumers can get cash when they need it — at least most of the time.

For VM, which now has 35 ABMs, the plan is to add a further “5 or 6” in 2025 to help ease the burden on the nation’s ABM network; there is also the aim to add more technology to service customers.

“What we are aiming to do is to have all the areas that we serve properly represented by technology. We have developed a robust banking system, with most of the changes taking place in the last 10 years.”

Looking to the future, Elliot said he plans to go after a new business segment: serving small and medium-size enterprises, many of which are headed by persons who remain unbanked, though in business.

“We are looking at how do we provide banking services to businesses, and to this end we have launched an online banking app for businesses, we have launched our business services operating account — because as a building society we can’t offer a current account,” he added.

But he said despite all the expansion and adding of new business lines, the company is staying true to its roots.

“As a mutual, one of the things that we have to remain true to is empowering our members by ensuring that we pay them on their deposits, and also where we can offer them loans at rates that are affordable. Now, mark you, we are not running a charity so we have to ensure the decisions we make are sound business practice and has to make profit to continue to fund the initiatives that has to be funded.”

He said adding new businesses costs over $100 million each time, which makes success even more critical due to the funds outlayed to start.

And instead of going into brick and mortar expansion, the bank is looking elsewhere for growth.

“The world of digital has opened a lot of opportunities for us…wherever our members are. We have a footprint in Canada, UK and the USA. One of the things that will be important over the next few years is augmenting our existing branch network with a digital bank…to ensure that we can go to scale and reach more Jamaicans, here and abroad, and provide services to them in a way that we want to.”

Elliot also added that with Bank of Jamaica pushing for account portability amongst banks so as to improve competition and the benefits it brings to consumers, VM has been on its toes to ensure its customers have no incentive to leave in favour of another institution.

“We have to build several service touchpoints,” he added, saying they are all designed to keep customers — including those overseas.

“We have started the programme of work to take a closer look at our membership across all the countries we serve,” he noted, saying programmes will be tailored to meet the demands of the specific demographic in each country. Those in the UK tend to be older while those in Canada tend to be younger, he said, citing an example.

He also shared that the building society is exploring new services to introduce to Jamaicans that are not offered in the country as yet, though he did not go into details.

But one of the biggest changes coming for VMBS is the conversion of some of its branches to a cashless system, with a smaller staff footprint, using more technology, “and looking at relationship management dominating that footprint”.

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